Watchdog launches probe into 'mortgage prisoners'
The Financial Conduct Authority are launching an inquiry into the world of mortgages, in a bid to find out why some homeowners are 'unfairly trapped' by their mortgages. There's claims that older people are being stopped from switching mortgages by lenders, and that's not on.
The FCA is going to look into whether or not lenders have been purposefully trying to confuse customers with needlessly complicated terms, or indeed, to find out whether they've clubbed together to fix prices. This comes on the back of the introduction of new lending rules, last year.
In some corners, it is thought that the Mortgage Market Review (MMR) has seen older borrowers becoming 'mortgage prisoners', which means they are unable to get a new loan or remortgage once their fixed-term deal has finished.
These rules were introduced in April 2014 by the FCA themselves, but there's a suspicion that lenders are being too literal with the FCA's new instructions on rigorous affordability checks.
Saga conducted their own study on this, and they found that one-in-ten 50-59 year olds felt that they'd been stopped from moving to another mortgage.
Elsewhere, there's also accusations that women have been discriminated against by mortgage lenders, over any plans to have a family. Again, thanks to MMR, lenders can refuse a mortgage if they believe an applicant will have a dip in income. As such, families have been hiding the fact that they are planning to have a family.
The FCA said that there's anecdotal evidence that "some types of consumers are becoming unfairly trapped and unable to access more suitable deals", adding: "We are keen to ascertain how prevalent this problem is."